Fashion is the next frontier for Lazada.
This story first appeared in the October 23, 2013 issue of WWD. Subscribe Today.
The largest online shopping mall in Southeast Asia, which launched in 2012 selling electronics, health and beauty aids and lifestyle products, Lazada quickly gained a following. The Web site has five million Facebook fans, said Martell Hardenberg, cofounder and fashion category manager.
Lazada is a marketplace that acts as a platform “to give large brands an opportunity to extend their reach, especially in non-metro areas where there is no retail infrastructure,” Hardenberg said. “We started with fashion recently so there are a couple if brands in the pipeline. Building a category like fashion won’t take very much time.” The site charges brands a commission based on sales. “It’s a partnership for us,” he said.
Hardenberg said the assortment is divided evenly between large global brands and homegrown local designers. Lazada sells Esprit, Timberland, Ray-Ban, Crocs, Moschino and Wacoal, among other labels. “Local designers sell very well and I see great potential in Indonesia,” Hardenberg said, adding that he wants to introduce Indonesian designers to other countries such as Malaysia and the Philippines. “We have this amazing network and an opportunity to promote brands outside the country,” he said. “They have great designs but don’t have marketing budgets.” Two local designers sold on Lazada participated in Jakarta Fashion Week, he said.
Lazada partners with local delivery companies to ship thousands of orders every day to the five countries it services — Indonesia, Malaysia, Vietnam, Thailand and the Philippines. “We want to scale up the fashion category in those five markets.”
Price resistance is higher in Southeast Asia than in Europe or the U.S. “Gross domestic product and income are way lower in [Southeast Asia],” Hardenberg said. “Because of the incomes here and the GDP, the market is less mature. We have a growing middle class, but it’s not as strong as Europe and the U.S. Fifty percent of the population is under 30 years old.”
Lazada offers a variety of categories to appeal to many income brackets. “We have customers that can do high baskets, but the focus has been on the medium- to low-price level, mass-market brands,” Hardenberg said. “We’re going to test the premium sector.”
Hardenberg is looking at China and believes the platform offers brands a way to overcome the lack of retail infrastructure in that country.
Lazada two months ago launched an Android app that got more than 100,000 downloads in the first two weeks. The company is also working on giving international brands their own shops-in-shop on the site. “We’re helping them provide their own look and feel,” he said. “In the Philippines, we started working on a shop-in-shop with Nike.”